Dollar Surges As War Clouds Deepen, Payrolls Dip Limits Gains

(RTTNews) - The U.S. Dollar rallied emphatically against major currencies during the week ended March 6 amidst a dramatic escalation in the U.S.-Iran conflict. However, data released on Friday showing an unexpected decline in job creation in the U.S in February renewed rate cut expectations, limiting the greenback's gains.

Nevertheless, the massive surge in crude oil prices at the onset of the new week has sobered rate cut expectations again, lifting the dollar. Here is a quick recap of the dollar's trajectory during the week ended March 6.

During the week ended March 6, the U.S. dollar inter alia rallied against the euro, the British pound, the Australian dollar, the Japanese yen, the Swedish krona, and the Swiss franc. It however declined against the Canadian dollar. The 6-currency Dollar Index added almost 1.5 percent over the course of a turbulent week, posting the best weekly gain since August 2025.

The Dollar Index (DXY), a measure of the Dollar's strength against a basket of 6 currencies added 1.41 percent during the week ended March 6. The DXY which had closed at 97.61 on February 27 finished trading at 98.99 a week later. During the week, the index traded between the low of 97.77 recorded on Monday and the high of 99.68 recorded on Tuesday.

While the dollar's moves were largely attributed to safe haven bids following the flare-up in geopolitical tensions, economic data updates from the U.S. also swayed sentiment.

Data released by the U.S. Bureau of Labor Statistics on Friday showed the U.S. economy unexpectedly shedding 92 thousand jobs in February, the highest in four months. This compared with a downwardly revised rise of 126 thousand in January and market expectations of a gain of 59 thousand. At the same time, the unemployment rate rose to 4.4 percent in February, up from 4.3 percent in January that the markets had anticipated. The weak labor market update spurred rate cut expectations from the Federal Reserve. Data released earlier in the week had showed better-than-expected levels of ISM Manufacturing PMI and non-manufacturing PMI.

As safe haven bids boosted the greenback, the EUR/USD pair slipped 1.66 percent in a week. During the week ended March 6, the EUR/USD pair dropped to 1.1618, from 1.1814 a week earlier. The pair ranged between $1.1800 recorded on Monday and $1.1530 touched on Tuesday. The euro weakened despite flash inflation readings from the region on Tuesday showing annual inflation rising to 1.9 percent in February, up from January's 16-month low of 1.7 percent that the markets had expected.

The week ended March 6 also witnessed the pound falling 0.54 percent against the dollar. The sterling, which had closed at $1.3486 on February 27 declined to $1.3413 by March 6. The GBP/USD pair traded between a high of 1.3486 touched on Monday and a low of 1.3252 recorded on Tuesday.

The Aussie also plummeted against the U.S. Dollar during the week ended March 6. The slippage for the AUD/USD pair during the week was around 1.2 percent, from 0.7116 on February 27 to 0.7030 on March 6. The pair whipsawed on Tuesday, trading between the week's high of 0.7126 and the week's low of 0.6944. Data released on Tuesday had showed the Australian economy expanding more than expected in the fourth quarter of 2025.

The Japanese yen also plunged 1.1 percent against the U.S. dollar during the week ended March 6. The USD/JPY pair which had closed at 156.06 on February 27, jumped to 157.80 in a week's time. During the week, the pair ranged between 155.65 touched on Monday and 158.10 recorded on Friday. Data released on Wednesday had shown higher-than-expected levels of consumer confidence in February.

With the Middle East war widening in geography and deepening in intensity, the safe haven dollar has resumed its climb. The six-currency Dollar Index touched a high of 99.62 earlier in the trade. It is currently at 99.27, versus Friday's closing level of 98.99. Fading rate cut expectations from the Fed following the jump in Brent crude oil prices on Monday to $119/barrel, the highest since June 2022 has also lifted the Dollar Index.

Amidst the Dollar's resurgence and concerns about global economic growth as well as an energy crisis, the euro and the pound have retreated further. The EUR/USD pair has slipped to 1.1561 from 1.1618 at close on Friday. The GBP/USD pair has decreased to 1.3352 from 1.3413 at the end of the previous week. The AUD/USD pair which was at 0.7030 at close on Friday has declined to 0.7016. With soaring oil process, the yen has weakened further, lifting the USD/JPY pair to 158.45 from 157.80 at close on Friday.